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TODAY'S OTHER NEWS

Landlords are being ‘persecuted’ under landlord licensing scheme – claim

Buy-to-let investors should be ‘extremely wary’ of buying property in an area affected by selective licensing rules because many local authorities are using selective licensing to introduce penalties for private landlords that go well beyond the mandatory government landlord licensing rules, according to Kirwans law firm.

The company argues that legislation introduced by part three of the Housing Act 2004 in areas affected by poor-quality rental properties, irresponsible landlords and anti-social behaviour, have enabled local authorities to routinely pursue the most serious enforcement option open to them, which can sometimes result in unfair penalties for landlords. 

David Kirwan, managing partner at Kirwans, said: “This can result in criminal records, rent repayment or a ban from renting out property. Even if LAs opt to avoid the courts, civil penalty fines of up to £30,000 can be imposed.

“However, rather than pursue these harshest of punishments, LAs also have the option of working with those failing to comply to offer advice and support, educating them about their duties and responsibilities and helping to create a reliable pool of landlords within the city.”

Kirwan points to Liverpool City Council’s decision to hold a public consultation into renewing its landlord licensing scheme for a further five years as a classic example of the ‘persecution’ of what he describes as ‘innocent landlords’.

Kirwan fears that the cabinet’s approval of the recommendation will result in more landlords being unfairly prosecuted if the consultation leads to the initiative continuing until April 2025.

He argued that the heavy-handed nature of the penalties meant inexperienced or first-time landlords who do not realise the importance of applying for licences could find themselves in court, forced to pay back 12 months’ worth of rent, or banned from operating properties in the area.

Kirwan added: “I have been extremely disappointed to learn then, that rather than choosing the option that, in some cases, would be eminently more sensible, councils such as Liverpool are all too often pursuing the harshest of punishments.

“The outcome is such that well-meaning men and women who have ventured into property letting in a bid to provide a pension or extra income are finding themselves in a truly terrifying situation simply for what is often a simple administration process failure.

“Meanwhile, the real rogue landlords may simply choose to avoid the licensed areas, moving their poor practices to areas where such schemes are not currently in place.”

Last summer, the government announced a review of selective licensing and how well it is working, with the findings due to be published this spring.

In the meantime, Kirwan is urging landlords to take extra care when buying a property in the Merseyside area.

He continued: “Liverpool City Council’s practice of punishing landlords who fall foul of the rules in the harshest possible way means that landlords must be extremely wary of buying in an area affected by selective licensing rules.

“Those that choose to do so must make sure that they have the necessary licences in place and ensure they comply with every obligation the scheme makes of them – or face what can be heart-breaking consequences.”

Poll: Are you prepared to buy property in an area affected by selective licensing rules?

PLACE YOUR VOTE BELOW

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    If a landlord falls foul of the laws laid down and ends up with a heavy fine I would just say tough luck mate, there is more to renting property than meets the eye. Should have done your homework first.

    Looks like this solicitor is falling into the realm of touting for business but not saying no win no fee. Shame on you those who 'practice' law in this way. They appear to be a bunch of money grabbing shysters to me.

  • Paul Barrett

    Isn't the problem here that if you are already invested in a particular area which then has Selective Licensing there isn't much you can do about it short of selling up in the areas where SL is applied.
    Of course before investing a LL should carry out full DD.
    But unless a LL has a crystal ball how will it be possible to avoid areas that may come under SL.
    I suppose it is just down to local DD to see what the crap areas are which might attract SL.
    That could be whole cities like has happened in Nottingham!!!
    SL areas are usually where all HB tenants are.
    So I guess if you avoid HB tenants you will by default avoid investing in potential or actual SL areas.
    This SL situation will just deter even more LL from investing in HB areas.
    Can't see how this assists HB tenants?
    HB tenants are the cause of SL because of their deviant behaviour.
    Discouraging LL from investing because of SL just makes things even worse for HB tenants as LL increasingly adopt a No DSS policy.
    It is hardly the fault of the LL if the type of tenants they take on cause such disruption etc that the Council introduces SL!!!!!

    SL will put off even more LL.
    There will be a flight to quality areas as more onerous policies are imposed in the crap areas.
    LL simply aren't going to bother with crap areas if they are subjected to costly policies like SL.

    The yield could be severely compromised if a LL becomes victim to any issues caused by tenants and results in big fines for the LL.
    A sensible LL simply won't even bother taking the risk.
    There is also an issue of lenders being reluctant to lend in any SL areas so the sales market is reduced to homeowners.
    Who by default won't wish to buy in crap SL areas.
    Properties in SL areas must surely have values reduced as a consequence of this situation.
    The lower end of the PRS is starting to look a bit risky for LL.
    Personally I would just sell up especially if mortgaged.
    I really don't get the logic of Councils who by these policies are actively deterring LL from remaining or investing in SL areas.
    Perhaps I am completely misunderstanding things here but I don't think so.
    I would give an SL area or potential SL area a wide berth!!!

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